From Perfect Storm to Successful Spinoff: How One University Overcame Wide-Ranging Challenges to Create a High-Tech Revenue Source

9/26/2016

Pete Young

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​In 2012, University of Maryland University College (UMUC) faced what President Javier Miyares described as a “perfect storm” in all of adult higher education—a mature market, increasing competition, rising costs, declining state support, and further cuts to education spending in the military and corporate sectors. Miyares, a self-professed “data guy,” looked to analytics to help guide UMUC along the pathway of stability and growth.

Consolidating and augmenting functions that already existed at UMUC, Miyares established a data analytics unit as part of what is now my division, the Office of Analytics, Planning, and Technology. Darren Catalano—a University of Virginia graduate with a degree in economics, previously director of business analytics for Rosetta Stone—led the analytics unit.

Catalano’s team started by identifying core questions the university needed to answer to set UMUC back on a positive path. Over time, the team developed and evolved a technology platform that encompassed data from across the university, increasing visibility into the connections between student outcomes, tuition revenue, and expenses. In tandem with the platform, a team was built up to provide ongoing data analysis and storytelling services to internal constituents. The combination of platform and services introduced significant efficiencies in reporting, while increasing opportunities to facilitate meaningful and strategic conversations across the institution. One example of a finding and corresponding action that resulted from this approach concerns insight into student enrollment behaviors. It was evident that students who waited until the last minute to enroll were consistently at the highest risk of subsequently withdrawing or failing the course.

The trend was so clear, in fact, that the why became a secondary concern. The university closed enrollment four days prior to the first class meeting, while a grace period allowed students to withdraw, without penalty, up to four days after a class began.

The results were dramatic. Undergraduate completion rates rose 7 percentage points over four years, while persistence rates increased by 4 percentage points.

At the same time, the analytics unit worked with the university’s marketing and enrollment management teams, helping to identify areas of opportunity and improve efficiencies. By the fall of 2014—thanks to better targeting and smart spending—UMUC had increased its stateside new student enrollments by 20 percent while reducing expenditures on student recruitment by 20 percent.

Against this backdrop, Miyares challenged senior leadership to propose ways to better position UMUC to grow and thrive in the increasingly competitive landscape of twenty-first-century adult higher education. No plan would be discarded as too ambitious; no idea dismissed as too far outside the box.

I worked with Catalano to draw up a blueprint that would build on the success of the data analytics unit, spinning it off into a separate company—one that would leverage the proprietary technology and capabilities that UMUC had developed. The company would continue to support UMUC’s operations while marketing its expertise to other colleges and universities in a fee-for-service model. Profits would benefit UMUC, helping to further reduce tuition for graduates of Maryland community colleges.

Miyares recognized the potential, and university leadership gave the project a tentative green light.

And the time was right. Capabilities have converged that were not available, historically: Extraordinarily inexpensive computing power offers substantial, massive computing capability and storage at low cost, allowing organizations to collect and process massive data. At the same time, with so much work being done electronically, the ability to collect data points has exploded.

And, as Miyares pointed out, academic leaders are becoming increasingly aware of the potential power of analytics.

“There are a growing number of senior administrators and presidents—huge percentages, in fact—who believe that analytics will play a key role in the success of their institutions,” said Miyares. “There may be some healthy skepticism, but bottom line, the challenges facing higher education—the need to be more efficient, more effective—are driving the interest in analytics.”

Enter HelioCampus—its name a mashup of Helios, the personification of the sun in Greek mythology, and hippocampus, a portion of the forebrain critical to memory and learning.

In broad terms, the company integrates data from an institution’s existing source systems, normalizes the data—adjusting values so they can be compared on a common scale—and models the data in a central repository. The data is then presented to the client via a series of intuitive and interactive dashboards, and HelioCampus team members provide ongoing data analysis and storytelling services to institutional stakeholders to identify, support, and expand analytics initiatives across all divisions of the institution.

Catalano, who serves as CEO of HelioCampus, points out that these are not theoretical capabilities. The company is a spinoff, not a startup.

“Our roots in higher education allow us to bring an honest perspective on the hard work required. We have done it before, we have gone through it, and we have identified ways to replicate and scale to bring advanced analytics capabilities to institutions at a fraction of the time and cost,” said Catalano. In a matter of months, the company had signed its first client.

Launching a spinoff introduces a host of logistical tasks and challenges, much of it mundane—settingup bank accounts, hiring a law firm, and so on. But considering the sheer breadth of things that have to happen to make a company real, being able to say, “And by the way, we have already signed our first customer” is a breathtaking outcome for any organization, commercially.

The venture has drawn praise from the likes of Maryland Governor Larry Hogan, who noted that UMUC has a long history of innovation, “making education accessible for people in Maryland and beyond.”

“We are excited and proud to see [UMUC’s] commitment to using this venture’s profits to reduce tuition, make education even more accessible, and ultimately, make Maryland a better place to live and learn,” said Hogan. “This is exactly the type of innovation my administration is looking for.”

University System of Maryland Chancellor Robert L. Caret echoed the governor’s enthusiasm, noting that “UMUC is again trailblazing a new path for higher education, not only in Maryland, but across the nation. HelioCampus fills an important niche as institutions of higher education seek cost-effective ways to utilize ‘big data’ without adding infrastructure and staff.”

HelioCampus is committed to providing institutional leaders and stakeholders with greater insight into the connections between student outcomes, tuition revenue, and expenses—and guidance on how to take action. The only obstacle to HelioCampus’s success, at this point, may be inertia—and higher education is famously subject to inertia. Now, though, the combination of increased capability and pressing necessity may converge to overcome that inertia.

“We get a lot of questions from institutions about setting up a data analytics unit,” said Catalano. “[But] why would you do this yourself? It’s grossly inefficient. HelioCampus can provide you with sophisticated, extendible capabilities at a fraction of the time and cost it will take to do it yourself.”

A February 2016 opinion piece in Forbes—“Big Data’s Coming of Age in Higher Education”—argues that “the application of data-driven decision making has begun to permeate all aspects of campus life and operations” and that 2016, in retrospect, may be seen as “the jumping-off point for policies and practices that define higher education in the digital era.”

I think it is safe to say that this is no longer optional. Everyone is going to need to have mastery of the data, and this is going to become the new, base-level capability that every institution must have.

Pete Young is senior vice president for analytics, planning, and technology, University of Maryland University College.

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